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Forum Post: 24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind

Posted 2 years ago on April 12, 2012, 4:14 p.m. EST by GildasSapiens (266)
This content is user submitted and not an official statement

"The U.S. tax code is a complete and utter abomination and it needs to be thrown out entirely. Nobody in their right mind would ever read the whole thing - it is over 3 million words long. Each year, Americans spend billions of hours and hundreds of billions of dollars trying to comply with federal tax requirements. Sadly, it is the honest, hard working Americans in the middle class that always get hit the hardest. The tax code is absolutely riddled with loopholes that big corporations and the ultra-wealthy use to minimize their tax burdens as much as possible. Many poor people do not pay any income taxes at all. The dishonest are rewarded for cheating on their taxes (if they can get away with it) and the ultra-wealthy have moved trillions of dollars to offshore tax havens where they can avoid U.S. taxation altogether. Our system is incredibly unfair to the millions of hard working people in the middle class and upper middle class that drag themselves out of bed and go to work each day and try to do the right thing. In addition, the current U.S. tax system is incredibly inefficient, it diverts a tremendous amount of resources away from more valuable economic activities, and it has chased thousands of businesses and trillions of dollars out of the United States. The U.S. tax code is such a complete and utter mess at this point that it can never be "fixed". The only rational thing to do is to abolish it completely, and any politician that tells you otherwise is lying to you.

The following are 24 outrageous facts about taxes in the United States that will blow your mind....

1 - The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare's works and collected them together, the entire collection would only be about 900,000 words long.

2 - According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 - 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.

4 - There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 - According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 - Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

7 - In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.

8 - The IRS spends $2.45 for every $100 that it collects in taxes.

9 - According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, "Tax Freedom Day" came on January 22nd.

10 - When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

11 - Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.

12 - The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

13 - According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

14 - Warren Buffett had an effective tax rate of just 17.4 percent for 2010.

15 - The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.

16 - Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.

17 - The United States has the highest corporate tax rate in the world (35 percent). In Ireland, the corporate tax rate is only 12.5 percent. This is causing thousands of corporations to move operations out of the United States and into other countries.

18 - Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

19 - In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

20 - In a previous article, I discussed how many of our largest corporations make huge profits and yet pay less than nothing in taxes....

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice. These are combined figures for the tax years 2008, 2009 and 2010.

During those three years, all of the corporations below made a lot of money. Yet all of them paid net taxes that were below zero for those three years combined.

How is that possible? Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero.

If you have not seen these before, you are going to have a hard time believing some of these statistics.....

Honeywell

Profits: $4.9 billion

Taxes: -$34 million

Fed Ex

Profits: $3 billion

Taxes: -$23 million

Wells Fargo

Profits: $49.37 billion

Taxes: -$681 million

Boeing

Profits: $9.7 billion

Taxes: -$178 million

Verizon

Profits: $32.5 billion

Taxes: -$951 million

Dupont

Profits: $2.1 billion

Taxes -$72 million

American Electric Power

Profits: $5.89 billion

Taxes -$545 million

General Electric

Profits: $7.7 billion

Taxes: -$4.7 billion

Are you starting to get the picture?

21 - Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government.

22 - Many wealthy Americans hide enormous amounts of money outside the country in order to avoid paying taxes. According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks.

23 - The number of traffic accidents spikes each year right around April 15th. The following is from a recent Bloomberg article....

Deaths from traffic accidents around April 15, traditionally the last day to file individual income taxes in the U.S., rose 6 percent on average on each of the last 30 years of tax filing days compared with a day during the week prior and a week later, according to research published in the Journal of the American Medical Association.

24 - Most of the tax debate is focused on income taxes, but the truth is that Americans pay dozens of other taxes every single year. The following are just a few of the taxes that many Americans pay....

1 Building Permit Taxes

2 Capital Gains Taxes

3 Cigarette Taxes

4 Court Fines (indirect taxes)

5 Dog License Taxes

6 Federal Unemployment Taxes

7 Fishing License Taxes

8 Food License Taxes

9 Gasoline Taxes

10 Gift Taxes

11 Hunting License Taxes

12 Inheritance Taxes

13 Inventory Taxes

14 IRS Interest Charges (tax on top of tax)

15 IRS Penalties (tax on top of tax)

16 Liquor Taxes

17 Luxury Taxes

18 Marriage License Taxes

19 Medicare Taxes

20 Property Taxes

21 Recreational Vehicle Taxes

22 Toll Booth Taxes

23 Sales Taxes

24 Self-Employment Taxes

25 School Taxes

26 Septic Permit Taxes

27 Service Charge Taxes

28 Social Security Taxes

29 State Unemployment Taxes (SUTA)

30 Telephone Federal Excise Taxes

31 Telephone Federal Universal Service Fee Taxes

32 Telephone Minimum Usage Surcharge Taxes

33 Telephone State And Local Taxes

34 Tire Taxes

35 Toll Bridge Taxes

36 Toll Tunnel Taxes

37 Traffic Fines (indirect taxation)

38 Utility Taxes

39 Vehicle License Registration Taxes

40 Vehicle Sales Taxes

41 Workers Compensation Taxes

When you account for all forms of taxation on the federal, state and local levels there are many Americans that pay out more than half of their incomes in taxes.

We are being taxed into oblivion, and yet most Americans do not even realize that it is happening.

It is kind of like being killed by thousands of tiny cuts.

So what do all of these taxes buy us?

They buy us a massively bloated government that wastes money on some of the craziest things imaginable.

Millions of Americans work for the federal government, and yet most of them produce very little of real economic value. The following comes from a recent National Review article....

By 2005, the federal government employed 14.6 million people: 1.9 million civil servants, 770,000 postal workers, 1.44 million uniformed service personnel, 7.6 million contractors, and 2.9 million grantees. This amounted to a ratio of five and a half “shadow” government employees for every civil servant on the federal payroll. Since 1999, the government had grown by over 4.5 million employees.

According to that same article, when you add in state and local government workers the numbers are even more dramatic....

According to the U.S. Census Bureau, there are 3.8 million full-time and 1.5 million part-time employees on state payrolls. Local governments add a further 11 million full-time and 3.2 million part-time personnel. This means that state and local governments combined employ 19.5 million Americans."

Read more: http://theeconomiccollapseblog.com/archives/24-outrageous-facts-about-taxes-in-the-united-states-that-will-blow-your-mind

7 Comments

7 Comments


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[-] 1 points by me2 (534) 2 years ago

Shit's crazy.

[-] 1 points by hchc (3297) from Tampa, FL 2 years ago

Excellent Post. Thank you. We need more people like you.

[-] 1 points by April (3196) 2 years ago

Thanks for reposting this. I saw you post it before and forgot to copy it. Now I can read the rest!

Different topic, but in the interest of sharing - the Fed Reserve Bank of Dallas recommends breaking up the big banks. My own US Rep, in a town hall style meeting recently, after a constituent mentioned the financial crisis and Glass Stegall, he specifically said there are (not an exact quote, but pretty damn close), "people looking into anti-trust issues" with respect to the banks, I presume, is the way I interpreted it. Unfortunately, I didn't get a chance to follow up further.

http://dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf

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[-] 0 points by Gillian (1842) 2 years ago

I'm so smothered with taxes for everything.
Here's a good documentary on income tax:

http://www.youtube.com/watch?v=lUpZhhbKUBo

Freedom to fascism documentary that everyone should watch. I have friends in this movie who owned a small deli...watch what happened to them one Easter weekend ( 52:50) .

[-] 0 points by shadz66 (18252) 2 years ago

Perhaps it would be more fair to ensure that Corporations paid their fair share of taxes :

A very real and fundamental point to bear in mind is that taxes on individual entrepreneurs, small & medium sized businesses and just about everyone else in society (The 99%), would be lower if Imperial Wars could be ended AND IF the 1% and all the Corporations (apparently 'legally individual persons') paid their Proper and Fair Share of the Taxes !

The Banking Corporations in particular are the primary culprits in this 'cult of tax avoidance and evasion' and their opposition to The 'Tobin' / Financial Transaction Tax, is utterly unconscionable given the long term existence of the highly regressive 'Sales Taxes' and 'Value Added Tax' (currently 20% in The UK!), which everyone else has to pay !!

fiat justitia ...

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

Great post! I love posts that are driven by data and statistics instead of just rhetoric.